2007-06-25 Regular Meeting and Workshop Meeting (2)

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City Council Meeting and Workshop Meeting - June 25, 2007 Page 7 Moser: that's my fear with this study the fact that the number is going to be "I'm going to throw down a million dollars right now it cost $375,000 is what it cost to fund our retirees that serve the City the accrual comes back at over a million dollars" We go to budget this upcoming budget in August, this number is going to be held over the retirees head and that's where were going to start cutting their benefits. That is what I perceive this accrual statement doing to us is being used against them come budget time. Mayor: Actually, it is all employees and retirees. That is everybody in the insurance pool. It is not just retirees its our obligation to everybody that's in the system. Tom: they'll look at their length of service. Moser: it's our obligation to them. Dolby: your talking about everybody all together the current and retirees together. Moser: yes but the retirees is what is going to be effected by this come budget if this number cannot be funded. If this council decides that this number cannot be funded those retirees are the ones that are going to get cut at that time or their benefits will possibly get cut to bring the accrual into our financing plans. Tom: I'm not real familiar with your plan but I think you only have one plan, so if you have one plan it will effect current employees and retirees as well. Dolby: together yes. Moser: the retirees are the ones trying to live now. The are the ones on the fixed income that I'm concerned too about. So I guess that's why I'm focused on them but I understand what you are saying. Tom: again GASB45 does not mandate funding liability. Beasley: even if that million dollars comes back we don't have to fund it. We don't have to do anything, we can live year to year, and hope for the best for the future. If council ten years from now has to cut things, they cut things and we can just go year to year and hope for growth in the city and other places. Rigby: that growth could affect our bond rating. Tom: I think what they are looking at is the trend and how you react to the trend as a management group. Dolby: that means if it goes up we need to take steps and try to mitigate it and get it down. Tom; unless revenues are up. Moser: that's the reason you do it every year. That is a good point you brought we are talking about an irrevocable trust is the only way this thing will work. Tom: it's not mandated.